Wednesday, August 21, 2024

Economy watch: Don't believe the politicians. No improvement is in sight.

 

The news media keep trumpeting economic "good news" - which is largely made up out of whole cloth, ignoring the reality of what's going on all around us - but if you dig down and look at the fundamentals, things are still very fragile.  Here are a few examples.

  • Wayfair CEO likens home goods slowdown to 2008 financial crisis:  “Our credit card data suggests that the category correction now mirrors the magnitude of the peak to trough decline the home furnishing space experienced during the great financial crisis,” Wayfair CEO Niraj Shah said in a news release. “Customers remain cautious in their spending on the home.”
  • Car Repos Rise 23% YoY:  The private debt crisis is becoming apparent in America after car repossessions jumped 23% during the first half of 2024. Data shows that 1.6 million Americans will have their car repossessed by the bank before the end of the year.
  • Financial Strain On American Households Hits Retailers Hard:  American consumers, increasingly overextended on credit card debt, and having depleted their pandemic-accumulated savings, have started to close their wallets to all but essential, non-discretionary purchases such as food and fuel. The portion of surveyed Americans who state a positive intent to purchase big ticket items such as a home, an automobile, or a major appliance has fallen substantially since May.
  • Burgers, Botox and Birkins: Consumer Pullback in China and U.S. Hits Broadly:  “With a large chunk of world consumer spending under pressure, companies now need to be more creative about avenues to generate revenue growth,” said Gregory Daco, chief economist at Ernst & Young.  If consumers in the U.S. do falter, it would mean a double whammy for multinational companies, which have been confronting weak demand in China for several quarters.

You can read more details by following the links provided.

If you're well off, you probably haven't noticed much of what's been going on, because wealth has an insulating effect.  For the rest of us, having to count our dollars carefully and plan where best to spend them, it's been a very difficult year so far.  All I can say is, keep your powder dry - by which I mean, spend as little as you can, cut out non-essentials, and save up to build an emergency reserve fund in case of hard times.  For a lot of families, the loss of even one month's income by their primary breadwinner is unaffordable right now - but I have a feeling a lot of us are likely to face that, and worse, before too long.

The coming elections in November will make things worse, not better.  If political unrest breaks out in the streets, adding to peoples' already agitated emotions, who knows what the knee-jerk reactions might be?

Stay careful, friends.

Peter


8 comments:

  1. A little lying must be expected from any politician, but the level of prevarication we've the last couple years here in the US rivals anything a 3rd world Junta ever did. They flat out stopped even trying to be accurate with economic stats and just blather anything that makes them look good. I suppose they are trying to eek out just a few more years of looting before the crash.

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  2. We are mounted on that Economic Beast no matter who gets into the office of President and controls the Congress. The question becomes who do you want in charge as we charge headlong into a world wide collapse?

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  3. " If political unrest breaks out in the streets..." If? Like in the BLM riots, burning down cities around the country? Like pro-Hamas protests on college campuses? It's happening now and has been happening for years. It's just a matter of if they happen to target where readers are.

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  4. Our goofball of a floor manager at work keeps telling us that "incoming" at work is slowing down quite a bit. Ever since I made an honest effort to tithe, God has kept me financially sound, though.

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  5. My wife and I consider ourselves to be well off, but some would not. We are noticing the effects as well.

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  6. I'm making slightly more than I did fur years ago and can't afford what I could four years ago. That's the only "report" I'm concerning myself with. Anything I here on TV or read online I regard as 8u11$h!t...

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  7. Luxury spending is down in my area. And the construction of high-end homes has slammed to a halt, including projects that are in progress. A family friend is a skilled tradesman, and he's seeing a big slowdown as well.

    TXRed

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  8. Keep on stacking your preps ! These are the good old days.

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